'Get back on the job': Notley calls for Trudeau to act after China ban hits Alberta canola producers

A canola field in Alberta. Canada is the world's top grower of canola, an oilseed invented by Canadian scientists in the 1970s by breeding out undesirable traits from the rapeseed plant.Mike Drew/Postmedia

Premier Rachel Notley is demanding Prime Minister Justin Trudeau take action after China blocked some Canadian canola imports, a move which could cost Albertans “hundreds of millions” and “3,000 jobs.”

China’s Foreign Ministry said Wednesday that it is blocking some imports of Canadian canola due to fears of insect infestation. Richardson International Ltd., one of Canada’s largest grain producers, said Tuesday that the country had revoked its permit to export canola there amid infestation allegations. Canada disputes that claim.

Notley, in a Wednesday statement, came out swinging, noting that Richardson International Ltd. exports 30 per cent of Alberta’s canola.

“Today, we learned that the Chinese government is barring a huge chunk of our canola shipments from entering their country. This is wrong and it’s unfair,” said Notley.

“Seventy per cent of agri-food exports to China from Alberta are canola-related products. And canola farming contributes billions to the Canadian economy.

“So, today, I’m calling on the prime minister to get back on the job and fight for our canola farmers and the jobs they support. We are calling on Ottawa to stop its navel-gazing about its internal controversies and fight back.”

The premier went on to demand Ottawa “be in Canada’s corner.”

“Alberta farmers and Alberta workers stand to lose hundreds of millions of dollars and up to 3,000 jobs if this is not resolved,” said Notley.

“We need certainty.”

Federal Agriculture Minister Marie-Claude Bibeau in a Wednesday statement called the issue a top priority for the Canadian government and said she is in talks with provincial partners.

“Our government understands the importance of the canola industry to the Canadian economy,” said Bibeau. “We are taking a science-based approach to finding a solution.”

Some observers are speculating that the block may be the latest swipe against the Canadian government for arresting a top Chinese tech executive.

“We’ve seen a huge drop-off in canola prices, especially over the past couple of weeks,” said Bruce Burnett, director of weather and markets at Glacier FarmMedia.

He called it a major drop for the commodity, which likely wouldn’t have happened without the backdrop of a deteriorating relationship between China and Canada. The fallout follows the arrest of Chinese tech giant Huawei CFO Meng Wanzhou in Vancouver on Dec. 1, 2018.

On Dec. 3, the May futures contract, which Burnett noted was not the most actively traded at the time, closed at $496 per tonne. Wednesday afternoon, it was trading at about $456 — a roughly eight per cent drop. It was expected that exports to China would remain strong through most of the crop year, he said, with fairly solid prices.

Canada exported about $3.6 billion worth of canola seed, oil and meal to China in 2017, according to the Canola Council of Canada’s most recent figures.

Now that China has blocked Richardson’s shipments, the question becomes: what will happen to other companies, Burnett said.

It’s possible others could have their permits revoked. But, unlike Winnipeg-based Richardson, other players in Canada tend to be part of large multinational organizations. Regina-based Viterra Inc., for example, is part of Switzerland-based Glencore International.

While it’s hard to read the minds of what the Chinese government is thinking, it’s likely these companies will be very cautious, he said.

“There’s large amounts of money involved here that the companies will be very wary of shipping cargoes that could be rejected or that type of thing.”

Sherwood Park’s Ward Toma, general manager of Alberta Canola Producers Commission, said his group has been working with the Canola Council of Canada, which has been working with federal government officials in contact with the Chinese government.

“Right now we’re just hoping for a fast resolution, there’s been very little info of what is going on and we’re waiting to hear more,” Toma said Wednesday afternoon.

“The longer this drags out, the better the chance that canola prices that farmers get paid will decline. That will impact sales and everyone along the canola chain will be impacted by it.”

Al Mussel, research lead and founder of Agri-Food Economic Systems Inc., said it’s a convenient time for China to decrease the amount of canola it imports because the country is grappling with an outbreak of African Swine Fever, a fatal disease that targets pigs.

That means China doesn’t need as much canola to feed its pig herd, said Mussell, adding that some estimate the country will drop its pork production by up to 20 per cent this year.